Marc Faber Warns "The Market Is Waking Up To How Clueless The Fed Is"

"I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash," warns a somewhat excited sounding Marc Faber, adding that he thinks "it will be worse."

The pain is just getting started as Faber notes that "the market is slowly waking up to the fact that the Federal Reserve is a clueless organization." Internet and Biotech sectors (growth stocks) are "highly vulnerable because they're in cuckoo land in terms of valuations," and fully expects the selling to spread as The Fed "have no idea what they're doing. And so the confidence level of investors is diminishing," and that means we will see a major decline.

As much as I agree with Marc, at this point he's like a stopped clocked being right twice a day and wrong every other time. Marc has been preaching doom for so long that of course at some point it will hit.

I glare at the NYFed and its prodigy ......... currently the "vice" chmn and all the other formers that 'effect' the dual mandate of the Federal Reserve "System" .....calling Senator (self-designated smartest person in the Senate) Schumer ... any "advice"

Dude, the 1987 crash led to a massive feedback loop that pulled the entire commod complex down for 3 years. Long enough for the USSR to blow up, and LTCM to go zero (which was roughly the Citadel of it's time). Go read Bookstabber's "a demon of our own design" tonight. The breakers were not designed for 2b quotes a second. If there is a serious limit down, it would be like a dns attack on every price quote. Facebook's IPO unfolding on every major index weight with prices being crossed at a whole bunch of prices, some a full 50 seconds behind other quotes; so where is the average price ? When they do put on the breakers, what's a real trade vs the other 1.9999b trade quotes ?Are they going to bust a whole day of quotes? what happens then when they restart the networks ?

You would need to shut the whole place down and basically "eject the warpcore", where you manually process all the orders on constrained volumes from only established and recognized dealers. HFT's would be banned on site for another 20 years (until a new AI loophole is found). Imagine the entire world trying to panic sell post bank-holiday, and then to process a book that normally would be 60% cancels or rebates, now you have to check every ticket the old way. What will that do to the bid/ask spread when Blackrock or Fidelity needs to GTFO out of 80% of the NASADQ biotechs ?

3 day settle now becomes 5 days since the algos can't be trusted. Now what will that do for retail confidence when their RRSP's & day trading books are frozen. What will that do for guys trying to cover margins ? At what point will the full on route finally break the Money Market funds who are still providing base liquidity to currency guys.

What will the largest bagholder funds of subprime & UST's suddenly do when we go limit down ?

I know you have /sarc, but for those who do not know. 87 is/was no joke and that panic was only saved by the limitations of how much the pits were still dependant on human ticket checks + computer horsepower.

Today ? You could play ping-pong with the VIX (and we all on ZH know it happens) in picoseconds before anyone knows wtf is going on. and that's with 70 ms latency. Imagine the gong show someone could do with XOM at 300 ms. or 500 ms.

Or maybe not. Yellen may just say fuckit and declare all oil companies are now tax free national security NOC's like CNPC and Sinopec and all US manufacturing on-shore is now a mega-free trade zone like Dailan, and the SPX hits 9,000.

I wonder if ZH is going to apologize to Dennis Gartman after giving him shit for his negative call on the market yesterday? Faber, I guess, is at least consistent, but how long can you spin the same garbage year after year and still get media attention for it?

Maybe that's because Faber is the clueless one, not realizing Fed is playing out a speific plan of looting the nation for its banker owners, a plan they could implement only after (causing) the '08 meltdown.

Agree tmosley. They can tax you right off of your farmland. Or better yet, you will farm the land and give them the food it produces. And if you are lucky they will let you keep enough so you don't go to bed hungry every night. Get to work slave and hoe that field!!

Actually the Bureau of engraving and printing prints the buck at the request of the Treasury. I do know what you mean the Fed does request the notes to be printed. However, there is a limit to printing, does a crash of magnitude preclude extraordinary printing?

They can create digital dollars on a seconds notice. Who needs a printing press? How many of your dollars are real and how many are digital?? Ya that's what I thought... Most of them are digital. Press the 0 key one time and you go from one trillion to 10 trillion.

A million years ago when I had to turn in weekly sales forecasts at some God-forsaken job, I would sometimes just take the previous week's report, change the date and hand it back in. My record was 9 weeks in a row without anyone questioning it.

I think they love him in the media because every so often he says some really over the top shit, like people should buy machine guns or thai hookers. So having him on is kind of like gambling on the off chance that he'll say something good.

Any attempts to cut spending get whacked in the Senate. The President would not sign any meaningful spending decreases anyway. He's going for the full collapse so we can all live in the glory of Next Tuesday!

The problem isn't the Fed is clueless. The problem is the Fed no matter what they do stops a truthful & real capitalist economy. The stock market and economy shouldn't have a central bank to begin with because that changes the whole system.

Real drop starts after the Easter 3 Day weekend as no one is going to want to wait for Sell in May and Go Away: May is too late. Deeper, further, worse then 1987? No shit Sherlock, never has there been such a facade of such sight, sound, and smell covering an unholy sight of grinding flesh and metal smelling like death. Remember 1937? Well, I've got this incredible feeling of deja vu all over again. Read the LIE OF OMISSION, every late Friday at www.electanewcongress.com and "The Science of Liberty: American Reformation & Renaissance", coming out in ebook form FREE, by late April/early May. SERFS UP AMERICA!

The Fed would like to leave fed funds rate at 0, but doing so would contradict the "strong economy" line from the White House. You know, when economies are truly doing great, you're suppose to raise rates, cut spending, etc. and all that...

I think the timing of these remarks re: the Fed is spot on. I laughed out loud when I glanced at the summary of the Fed's minutes. The 6.5% UE threshold is "outdated." Give me a fucking break. The truly don't know what they are doing (don't know what to do, don't understand the effects of what they do, etc.).

The Fed has been doing what it does for many years. What is happening, the people are finally waking from their being clueless, only because it has become so egregious in your face, that even a brainwashed, drooling vaccine taking, fluoride drinker zombie is starting to see what is happening to them.

For a long time I have been trying to develop a scenario for a market "super crash" and a reasonable map that would arrive at such a situation. Most investors think that even if things go downhill fast that they will be smart enough to get out of the markets. But what if it hits like the flash crash on steroids?

We know that can't happen because circuit breakers have been put in place to arrest panic style moves, but imagine a market that falls, trade is halted, and the market simply does not reopen for days, or even weeks. We have set up a house of cards based on debt and contagion is the cancer eating at the foundation. the article Flash Crash On Steroids can be found below.

On Wednesday, that dispute teetered at the edge of deadly conflict, when Cliven Bundy’s family members and supporters scuffled with rangers from the Bureau of Land Management sent to protect the federal roundup of Bundy’s cattle on public land.

One of Bundy’s seven sons was shot with a stun gun, and Bundy’s sister was knocked to the ground; but no one was seriously hurt, and no arrests were made.

"This $hit's about to get REAL!" I've been reading this for 6 years and I'm now believing it. This is the first time in our history that MOST Americans DON't identify with the upper class. They now realize that all of the rules, regulations, taxes, fees, militarized police, tasers, pepper spray, FEMA camps. homeland security billion bullets are meant for them, not someone else.

“The Los Angeles 2020 Commission studied amongst other things the sorry state of LA's pension mess. In a case of can-kicking extraordinaire, its recommendation was to appoint another commission to further study the problem.”

A scathing verdict on Los Angeles’s civic health that was delivered in a one-two punch — the second on Wednesday — by a committee of lawyers, developers, labor leaders and former elected officials who make up something of the Old Guard here. The Los Angeles 2020 Commission presented a catalog of failings that it said were a unique burden to the city: widespread poverty and job stagnation, huge municipal pension obligations, a struggling port and tourism industry and paralyzing traffic that would not be eased even with a continuing multibillion-dollar mass transit initiative… On what is widely seen as perhaps the biggest threat to the long-term fiscal stability of the city — the crushing cost of pensions and worker benefits — the commission recommended appointing another commission.

Bankruptcy Inevitable

The 2020 report is sure to gather dust like all studies before and after until the inevitable happens. The inevitable is "bankruptcy".

The only conceivable way LA can meet its pension obligations is to reduce them.

Given that unions will not negotiate, the only conceivable way to reduce them is bankruptcy.

LA is already bankrupt, the only missing ingredient is political recognition of that simple fact.

I would bet my wonderdog, Muffy, that L.As' pensioners are, right this second getting their full pension checks, and will continue to do so, for a very very long time.

The 12 primary banks are using the FRNs that they have been receiving for nearly 6 years now to buy the stocks and bonds being liquidated in the CALPERS portfolio, at full, all time high value.

There is only a mythical pension crisis, not an actual one. The FED will see to it that those pensioners get their money.

So Bankruptcy is off the table, and the only reduction that need be made is for all new hires, and I would also bet that new hires are being told those elaborate and lucrative pensions are now a thing of the past. And he pension "Crisis" is being used as leverage to make them understand that various municipalities in LA can no longer afford the do nothing jobs, the lavish perks that unions 'negotiated' in the past.

why would the fed do that? these are very rich parents spoiling their young children by giving them a too generous allowance (which they spend at the company store). in real life these people work for a living, but this family has a money tree, and THE KIDS KNOW IT. this is a bad hollywood movie, of course the Fed will give them money to buy stocks. at some point there is a bit of drama: the kids are just off doing drugs, and the drug dealers keep playing along because mom and dad always come through (or there is a SCANDAL). so please the FED is MOMMY and DADDY and the market is SPOILED RICH KIDS, sometimes daddy divorces mommy, sometimes daddy has a heart attack (how many hollywood endings do you need?) sure some of them are bad, and the kids get what they deserve at least for a little while they have to go to work and pretend to be productive. and then the good kid who always worked hard gets to show his or her stuff. so he or she works for twenty years and makes something of themselves, and then the bad kid shows up again, broker and dissipated, ready to blackmail them over some little thing. so you see crime pays, almost

I can't figure out how Faber continues to get an audience. He obviously appeals to gloom-and-doomers, and like any stopped clock he will eventually call something right, but he is wrong 99% of the time, and even when he is right, he gets the reasons wrong.

Faber does not understand modern economics or finance one whit. If you are looking for sound investment advice, you should look elsewhere.

The Fed knows exactly what it is doing. There are not now nor havee there ever been any coinciidences or accidents (black swans). We are moving on a path that was prophesized long ago and is now being managed.toward its conclusion and the Fed is playing its part in that management. From the idol of Ishtar on Bedlow's Island to the idol of Marduk/Moloch in "the grove" those in power enact the will of their gods. Mystery Babylon with all of its arrogance and perversions will be destroyed and those in power are trying their best to corrupt and destroy as many as possible and bring in the age of everlasting Lucifer.

Most of those involved are simply useful idiots, spouting one thing or another and thinking that they are progressive, conservative or simply righteous. The serpent and his orders do their work. Even the elect are being deceived